Goldman Sachs analyst Brian Lee upgraded SunPower (SPWR) and Sunrun (RUN) to Buy from Neutral and SolarEdge (SEDG) to Neutral from Sell as part of a broader research note on U.S. residential solar stocks anticipating "volume tailwinds" in the second half of 2019 given the recent signs of strength in the sector's financing environment. The analyst's price target on SunPower goes to $11 from $6, Sunrun to $20 from $15 and SolarEdge to $52 from $35. Among the key catalysts, Lee cites California's mandate for new home rooftop solar that will require every new home built in the state starting next year to have a solar system, estimating the requirement to add 350MW-700MW opportunity for the sector which would account for 15%-30% increase in y/y volume. The analyst further notes that the timing of the 30% federal ITC tax credit expected to be phased down to 26% next year related to solar power installation will drive "heavy solar installation volumes between now and 2023" as companies seek to "safe harbor" volumes into year-end 19 in order to qualify future installations for the full 30% credit.

SunPower told employees today it was eliminating 1,000 positions, more than 25% of its workforce. In a letter to staff, Tom Werner stated: "I'm writing to share difficult news with you as we implement changes across our organization in the days and weeks to come. To position SunPower for the future, we need to achieve financial viability, which includes simplifying our business structure, transitioning away from areas where we have been unable to sustain profitable operations, and improving financial controls. As such, we are moving to a low fixed-cost model that we believe we will be able to better flex when the market is up or down. Specifically, we are winding down our SunPower Residential Installation locations and closing SunPower Direct sales. We are also reducing our workforce to better align our business with our new focus. With this shift, we will reduce our workforce by approximately 1,000 people in the coming days and weeks. While we worked hard to avoid this outcome, the market has been slower to recover than we initially expected. Additionally, we have dedicated resources to improving our financial controls, and will continue to do so. We believe this shift in our strategy is necessary to safeguard the company's future." Reference Link